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Carver Inc. purchased a building and the land on which the building is situated for...

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Question

Accounting

Carver Inc. purchased a building and the land on which the building is situated for a total cost of $987,000 cash. The land was
appraised at $261,062 and the building at $873,988.
Required
a. What is the accounting term for this type of acquisition?
b. Determine the amount of the purchase cost to allocate to the land and the amount to allocate to the building.
c. Would the company recognize a gain on the purchase?
d. Record the purchase in a horizontal statements model.
Complete this question by entering your answers in the tabs below.
Record the purchase in a horizontal statements model. (In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA),
or a financing activity (FA). If an element is not affected by the event, leave the cell blank. Enter any decreases to account balances and cash outflows with a
minus sign. Round intermediate calculations to 2 decimal places and final answers to the nearest whole number. Not all cells will require entry.)
CARVER INC.
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